Textura: The Little Tech IPO That Could

When Textura Corp. publicly filed for an initial public offering earlier this year, a few eyebrows were raised on the Street.

In a tricky market for tech IPOs, could a software company with revenues just under $22 million, that didn’t have Silicon Valley buzz, that was initially aiming for a market cap under $500 million, really have a shot at breaking through?

Apparently with the right story, you do have a shot. Textura, a Deerfield, Ill.-based company that makes web-hosted (a.k.a. “cloud”) software for contractors and construction firms, priced its IPO at the top of its range, after increasing the size of the deal twice. It then jumped 60% when the market opened, form its initial $15 to $24.

There has been much consternation in recent years about small-company IPOs. This deal, once it was upsized and priced at the top of its range, ultimately well exceeded the $50 million threshold that people talk about being seriously harmed by a combination of regulation, big-bank indifference, and high-frequency trading. But at $75 million, it was still the smallest software IPO of the year so far, according to Dealogic figures.

As previously noted, the company hits two hot themes — the housing and construction market, and the enterprise cloud software market. It also aims to not be a $22 million-revenue company for very long. It has generated sales of $15.3 million in the first six months of the year.

To be sure, it loses money on both a GAAP and Adjusted Ebitda basis. The company is using part of its IPO proceeds to repay acquisition-related debt that will alleviate some of that pressure, and buyers of the stock evidently believed results would turn around as sales grew.

By the close, the stock had retreated from its opening price and ended at $20.91, a gain of 39%. That’s good for the fifth-best U.S. IPO first-day jump so far this year overall, and the third best enterprise software debut behind Marketo Inc., which makes marketing software and jumped 78% in first-day action, and Tableau Software Inc., a data visualization company that jumped 64%.